Google Might Buy Hulu, But It Would Rather Fund The Next MTV Or ESPN (GOOG)

Published 4:00 am, Tuesday, July 26, 2011

But a person with knowledge of Google's video strategy says that Robert Kynci -- the executive that Google hired away from Netflix last year -- is more interested in building and funding professional Web video.

This person compares the current state of Web video with the rise of the cable industry 25 years ago. Back then, the big broadcasters knew cable would erode their audience so they began making "flanking investments" in their own cable brands. A lot of those brands are now household names, like CNBC and ESPN (which ABC bought in 1984; Disney later bought the whole shebang).

Now, big media companies like NBC, Hearst, and Gannett are exploring the same kinds of early investments in online video content.

LATEST BUSINESS VIDEOS

Report: Amazon’s US audience for Prime Video is Around 26 millionWibbitz

Science Reveals that Pizza Increases ProductivityBuzz 60

Trump blocks Qualcomm takeover by BroadcomEuronews

Here's the Scariest New Tech of 2018 So FarBuzz 60

Goodyear Presents New Tire Technology Designed for Electric VehiclesAutomotoTV

Nike to Investigate Workplace Behavior, Announces President will ResignWibbitz

Toys R Us Shutting Down Business In The USAssociated Press

The FBI Is Using Best Buy’s Geek Squad As InformantsFortune

Millennial Habits May Soon Bring An End to Passwords New Study ShowsVeuer

Mueller's Russia probeFox5

So look for Google to follow along those lines: rather than trying to buy the current MTV or ESPN, it will build the next ones, or make equity investments in the companies that are trying to do so.

As far as Hulu goes, this person acknowledges it's a trailblazing platform, but its real value is in the contracts it has with content creators. Those contracts are of relatively short duration and the content itself has uncertain value -- TV ratings can change very quickly. So it's not clear why anybody would pay such a huge premium for a company with such uncertain long-term value.

That said, Google can afford it -- the company has almost $40 billion in cash -- and want to keep Hulu out of the hands of competitors.